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Quest Means Business
Trump Warns of "Phase Two" if North Korea Sanctions Fail; Major Companies Pull Support from NRA; Dropbox Files for IPO as Stock Soar; Facebook Co-Founder Looks to Tackle Inequality; Dubai at the Forefront of Disaster Aid Logistics. Aired 4-5p ET
Aired February 23, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] RICHARD QUEST, CNN HOST: Closing Bell ringing on Wall Street. Strong performance by the Dow Jones Industrials. All the markets having a
very good late-afternoon session of 1.5%. And that's -- ah, good. I was about to say that was a pathetic gavel, but right at the end, sir, you
saved it. Trading is over, and the Dow is up. Just quickly show you this before we go any further. The Dow is up 349 points. A gain of 1.5
percent. Trading's over on Friday the 23rd of February.
Tonight, Donald Trump warns of phase two if his new sanctions on North Korea fail. While politicians argue business takes action. More companies
are putting pressure on the National Rifle Association. And the stock markets are soaring to the end of the week and now Dropbox wants a piece of
the IPO action.
Put it all together. I'm Richard Quest. Live from the world's financial capital, New York. Where I mean business, and what business today.
Good evening, it has been an extraordinary day in Washington, where not only President Trump, but the president children, all helped set the global
business agenda. I'll show you exactly what I mean. In the past few hours we've heard Donald Trump warn of a rough phase 2 for North Korea if
diplomacy fails. He's in the United States, that was the president's, phase 2 if sanctions fail. As the U.S. announced new sanctions on
Pyongyang, it was the President's daughter over in South Korea who was sent to brief the South Korean President in Seoul.
Now remember, she is there for the closing ceremony of the Winter Olympics which takes place tomorrow. And earlier we go back to India, his son Don
Jr. told CNN, it's been a good week for the Trump administration and the Trump organization before speaking in New Delhi.
So, before we look and put that into perspective let's go back to Washington. Because amid all of these events President Trump's former
campaign aide, Rick Gates, has pleaded guilty to two criminal charges. The conspiracy against the United States and lying to investigators. Mr. Gates
told the judge he will cooperate with prosecutors. It raises the pressure on Paul Manafort who served as Donald Trump's campaign manager and
maintains his innocence. David Chalian joins us from Washington. There'd long been a suspicion that Gates was going to turn. Do we know what forced
that turned?
DAVID CHALIAN, CNN POLITICAL DIRECTOR: Well, I would imagine the prospect of a very long prison sentence force that turn. Gates had -- you are right
-- for quite some time Gates has been indicating that he may be looking for a deal here. But what so interesting about one of the crimes he said he
actually pleaded guilty to today, Richard, is this lying to investigators. He apparently did that in the process of while offering a pother while
trying to tell investigators -- tell Mueller's team what he has to offer. He was actually lying in that very scenario. That's what he pled guilty to
today.
QUEST: OK. So, what is -- I know the big picture. The Russia angle, collusion, I understand that, David Chalian. But what is it that it's
thought he might be able to offer in this regard? What might he know?
CHALIAN: so, it may not be what might he know, it may be this is the way that Mueller is trying to get Paul Manafort and what might he know.
Remember, he was chairman of the Trump campaign for some short period of time. So, because Gates was Manafort's deputy it seems that what Mueller's
team is doing here is putting the squeeze on Gates as hard as they can. He flips now all to try to pressure Manafort who put out a statement today and
is still sticking by his guns maintaining his innocence. But this is to ratchet up pressure on Manafort. What might he know? I don't know the
answer to that, but it's pretty clear to me that that Bob Mueller would like to know what he knows.
QUEST: How does getting Gates to turn put pressure on Manafort other than Manafort simply saying, well Gates knows what he knows. Let him tell what
he knows. I'm still not saying anything, and Gates doesn't know what I might know.
CHALIAN: Manafort better hope Gates doesn't know what he knows. I mean, he was his closest deputy. He worked with him. I mean, they were
connected at the hip through the time of the Trump campaign that Paul Manafort was running the Trump campaign. You couldn't look anywhere in
Cleveland at the convention and that these two guys were not next to each other plotting strategy.
[16:05:00] Now, Gates, the White House maintains, this Gates and Manafort, these charges against them have nothing to do with the campaign. Well, let
see if Gates backs that up now that he's cooperating with investigators. Because if he has something to say about the campaign that Paul Manafort
has not discussed at all, I would imagine Bob Mueller is going to try to entice Paul Manafort to cut a similar deal.
QUEST: Give me the mood in Washington as this -- it's already a poisoned well. A toxic environment, that much we know. But we had the 13 Russians
and entities that were indicted. We had the new charges against Manafort and Gates. A controversy somewhat moot now with Gates doing what he's
done. And now we've got Gates's plea. What's the mood?
CHALIAN: The mood inside the White House is one of concern. And the mood around Washington is one of wariness with Mueller having a bunch of
momentum right now. He seems to be putting out publicly, Richard, now. As you just noted, all those details of what's come out, the pieces of the
puzzle starting to come together now. And he has ratcheted it up his public facing reveal of what he's learning. And I think that causes great
concern inside the White House.
QUEST: David, you have a busy weekend ahead of you as we work out the machinations of all. It's good to see you, sir. Have a good weekend.
Thank you.
CHALIAN: You too.
QUEST: As we mentioned earlier, President Trump's daughter is in South Korea. And she's urging South Korea's president to keep up the pressure on
Pyongyang. The United States applying fresh sanctions and threats that it will do more if though sanctions fail. CNN's will Ripley is in Seoul and
sent this dispatch.
(BEGIN VIDEOTAPE)
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Richard, just hours after Ivanka Trump arrived here in South Korea, her father, the U.S. President
Donald Trump, announced what he called the largest sanctions ever targeting North Korea. The U.S. Treasury sanctioning 56 trading and shipping
companies and vessels. This is all part of the Trump administration's ongoing maximum pressure campaign trying to completely isolate the North
Korean government and force them to give up their nuclear weapons. It was a topic that came up over dinner at the South Korean Blue House with South
Korea's President, Moon Jae-in and Ivanka Trump. They talked about the maximum pressure campaign. They said it's working. That is forcing North
Korea to come to the table and its cause North Korea to try to engage with the South. Try to drive a wedge between Seoul and Washington. Something
that President Moon said absolutely is not happening. He said he's in lockstep with the United States on North Korea and is fully committed
pressuring Pyongyang to give up their nuclear weapons.
North Korean state media not liking that very much. Even before the sanctions announcement, they put out a state media editorial saying
essentially that waiting for North Korea to give up their nukes would be about as stupid as waiting for the ocean to dry up. Those words always
colorful coming from North Korean state media. But they have said repeatedly to me and publicly that there deadly serious about not giving up
their nuclear arsenal.
And wondering if there will be any colorful moments at the closing ceremonies of the PyeongChang Winter Olympics. Ivanka Trump possibly could
be in the same VIP box with a high ranking North Korean delegation. Could there be those awkward moments like we saw with the U.S. Vice President,
Mike Pence. North Korea sending a very controversial figure to lead the delegation this time around. It's former spymaster, Kim Yong-chol. This
is the man widely believed in South Korea to be the mastermind of a 2010 attack on a South Korean naval vessel, the Cheonan, that killed 46 South
Korean sailors. Many people in this country asking questions, Richard. Saying, why would Kim Jong-un send somebody like that to an event that
South Korea is trying to do dub the "Peace Olympics" -- Richard.
(END VIDEOTAPE)
QUEST: Will Ripley who is in Seoul.
Now, the Chinese government has seized control of one of the country's most important companies. It's called Anbang. Chinese insurance regulators
said it remove the company's chairman from his post and is prosecuting him. The phrase is economic crimes. The government takeover is due to last one
year.
So, look at what Anbang owns, the well-known brands around the world. Here in New York you have the Waldorf-Astoria, and the strategic hotel chain in
the United States. Go across to the Netherlands and you've got banks in the Netherlands and in Belgium, Nagelmackers and a life insurance company
over is South Korea.
[16:10:00] Anbang is also known for deals that fell through. Notably Starwood and several deals with the Kushner family. David Dollar served as
a U.S. Treasury emissary to China. He's now senior fellow at the Brookings Institution, joins me from Washington. This is rather interesting isn't
it? Out of the blue. No warning and takes over one of the most well-known Chinese investment companies. Oh, and boots out and prosecutes the
chairman in the process. What do you make of it?
DAVID DOLLAR, FORMER U.S. TREASURY EMISSARY TO CHINA: I think it's mostly good news. Anbang has gotten into a pretty risky financial situation.
It's a big conglomerate doing a lot of things, so it's hard to know for sure. But one thing they've been doing is selling wealth management
products to ordinary people. Meaning they're borrowing money from ordinary people at relatively high interest rates. And then they're turning around,
and they are playing with other people's money, buying the assets you mentioned and of course, lots more assets in China. And so, it's a risky
situation. I think it was legitimate for the regulator to come in, take control of it for one year and try to basically preserve all of the people
who have lent money to the company.
QUEST: Fascinating to hear what you were saying. The most interesting thing that I heard was that you believed that that which they have done is
legitimate. In other words, this is -- this is the nuts and bolts of macroprudential regulation and management, not rather than a political land
grab, literally and figuratively to get their assets.
DOLLAR: right. I said it was mostly a good thing and it's certainly legal under Chinese law. This is an insurance company. It's the insurance
regulator that's taken them over under their regulations. You can do something similar in the U.S. if strategically important financial
institution were at risk. But there is a political element behind this, as well. Not in the sense of individuals. The chairman Wu here is actually
well connected. He's married to granddaughter of Deng Xiaoping. But it's political in the sense that he's one of the investors whose been moving a
lot of money out of the country. And the leaders are getting worried about this. And so, I think they are sending a message.
QUEST: Listen to what President Trump said today at the White House speaking next to the Australian Prime Minister, Malcolm Turnbull, on the
question of U.S. -China relations and the possible pitfalls ahead.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I don t think we've ever had a better relationship with China than we do right now. The only thing that
can get in its way is trade.
(END VIDEO CLIP)
QUEST: So, it's a theme the administration has repeated time and again. The president has repeated, trade is the -- what they say is the unfair
trade between the U.S. and China -- certainly as it relates to the WTO entry of China. And are you worried that the U.S. is going to embark on a
more protectionist policy?
DOLLAR: I'm definitely worried about it because they've certainly made some noises and talked about some harsh things. What they've done so far
are pretty small measures consistent with what the Obama administration was doing. So, the big question will be when this 301 investigation -- the
investigation's in. When they make a decision about what to do this would open up the possibility of doing something big. I think in the end Trump
will back away from that, but it's certainly a risk and it's something the Chinese are very worried about.
QUEST: Glad to have you in. Please come back again, sir. Excellent to have you on the program. Thank you.
As we continue tonight, corporate pressures mounting on America's powerful gun lobby. The companies are cutting ties with the National Rifle
Association. The NRA, is the latest example of the chief executive as the new moral compass. After the break.
[16:15:00] (COMMERCIAL BREAK)
QUEST: Donald Trump is defending his proposal that the only way to stop school shootings is to arm some American teachers with guns. The president
was appearing alongside Australia's Prime Minister, Malcolm Turnbull, at the White House when Mr. Trump explained his reasoning.
(BEGIN VIDEO CLIP)
TRUMP: The bad guy thinks that somebody's in this room with a weapon that's going to be pointed at him with live bullets. He's not even going
into the school. It's the one way you're going to solve it. You're not going to solve it with gun-free spaces.
(END VIDEO CLIP)
QUEST: After mass shootings in the United States, the heat is traditionally turned up on the powerful gun lobby, the NRA, the nice
National Rifle Association. A week after the 17 murders in a Florida high school, the corporate pressure is now really mounting. For car-rental
brands have cut ties. You see them there including Enterprise, Alamo and National. Last hour Hertz also joined in ending the NRA rewards program.
Symantec, maker of the Norton antivirus software is stopping the NRA discount. And the First National Bank of Omaha will no longer issue NRA
branded visa cards. It cited customer feedback. Bruce Turkel is the branding expert, chief executive of Turkel Brands. He's the man we turn to
whenever we need to understand this. Bruce, this is interesting because, you know, the NRA, love them or hate them, they are a powerful force and
these companies coming out so soon must believe that the tide has turned.
BRUCE TURKEL, TURKEL BRANDS: The tide has indeed turned. My own senator, Marco Rubio, said there's nothing you can do about guns. The cat is out of
the bag, the toothpaste is out of the tube. But what these companies see is that's not true. What these companies understand is that consumer
pushback is getting bigger and bigger. You see it first in the two places it happened. You see it in banks because they directly deal with money and
what their consumers do with their money. And you see it with tourism, in this case rental car companies because people make decisions day in and day
out what tourism opportunities they're going to have. You're going to see it next with retailers.
QUEST: But why? Why should -- I mean, why should the car rental companies playing devil's advocate here, Bruce, why should they withdraw the NRA's
sponsorship or ending the NRA rewards program? When the NRA is doing nothing illegal. It's taken a point of view that you and I or others or
maybe the nation may disagree with. But it still has a lot of support for the position it's taken. So, why should they be penalized in this way?
TURKEL: Fascinating Question. They are doing -- the car rental companies in this instance -- the same thing the NRA is doing. The same thing that
Deep Throat told us to do in Watergate. They're following the money. The NRA is a trade association. Yes, they talk Second Amendment. Yes, they
talk individual rights. They do that for their members. But they support their founders, the gun manufacturers. And it's about lobbying to keep
those products selling. Well, the car companies, the banks and as I say, soon the retailers, understand that it's about their businesses. And
there's a lot more people -- survey after survey after survey proves it -- there's a lot more people who want sensible gun control. They want
sensible background checks.
QUEST: Right, but Bruce. Bruce is there -- do you know anybody that is not going to rent a car when the price is lower, or it makes more sense on
the basis that is some tangential relationship between Hertz and the NRA that nobody knew about until they made this announcement?
[16:20:00] TURKEL: Of course, I do because the minute somebody starts posting an NRA discount card on Facebook everybody who is against the NRA
is going to stop getting cards from those people. The minute people say, wait, where those bankcards come from? Oh, the National Bank of Omaha?
I'm not doing business there. Of course, is going to happen, Richard. That's the way this works. It's Sisyphean, where pushing the rock up the
hill. It happens slowly. But it happens. It's a groundswell. And this time because kids are talking about it. Because kids are the ones who are
saying enough, knock this off. We don't feel safe. Who wants to be associated with that?
QUEST: You said it was this fear and that parable, of course, the rock rolls back down again. In other words, there will be no long-term effect.
TURKEL: I don t believe that. I think what happened is the tide, as you put it, has turned. And thanks to democratized media. Thanks to Facebook,
Twitter, on and on and on, people who care about this have as much ability to reach out as the companies and the politicians. This is going to be
very different this time, mark my words.
QUEST: Bruce, good to have you on the program, as always, hope the weather is nice.
TURKEL: Thank you, Richard.
QUEST: I'm coming to spend the weekend in Miami. Make sure the sons out.
TURKEL: I'm looking forward to it. I have a guest house, you know?
QUEST: Now there is a free accommodation. Thank you, Bruce.
All right. A late afternoon rally on Wall Street ended a short week of trading on the high note. Look at the numbers. That's the Dow. Up 1 1/4
percent. The Nasdaq and the S&P were also higher led by tech and banking stocks. The account storage provider Dropbox filed for an IPO and Clare
Sebastian is with me.
CLARE SEBASTIAN, CNNMONEY CORRESPONDENT: Yes, Dropbox, another tech IPO, Richard. Essentially the biggest since Snap. Is that a cautionary tale?
I think that's the real question. But Dropbox has been around since 2007 but it found itself in a bit of a sticky situation a couple of years ago.
When it suddenly realized it was selling cloud storage when companies like Apple and Alphabet were giving it away for free. Having said that, they
did pivot their business after that. They started to turn toward more business customers. They look at collaboration.
QUEST: How much are they going for?
SEBASTIAN: They want to raise 500 million.
QUEST: Do we know when the IPO take place?
SEBASTIAN: Not yet, nor the price. But we will keep watch that because this is obviously a key thing. It's risky for tech companies like Dropbox
to go public.
QUEST: Have a good weekend.
A mixed end to the week around the euro bosses. Gains in Germany and France, losses in London and Zurich. All down to a wave of mixed corporate
earnings. Stocks in IAG, the price of IAG, the parent company of British Airways and Iberia fell nearly 6 percent. Investors seemed disappointed
with IAG's fourth-quarter results despite rising profits and a positive outlook. Earlier, the chief executive, Willie Walsh, gave me his score
report card. It was a classic report card. Good work. But must do better.
(BEGIN VIDEOTAPE)
WILLIE WALSH, CEO, INTERNATIONAL AIRLINES GROUP: All of the airlines improved and produced a record financial performance. And interestingly,
they actually all produced a record operational performance in terms of things like punctuality, regularity. So, you know, it was a well-rounded
good performance from everybody. These guys running the airlines have done a very good job, but I want them to do more, and it's well within the
capacity of the business to do more.
QUEST: Fuel started to raise its ugly head in terms of costs in the fourth quarter. No amount of hedging and no amount of planning, I mean, if fuel
decides to go up, it's your second largest expense. You going to take a hit.
WALSH: Some of that increase comes through additional capacity because we are growing the business. So, about half of it comes through in terms of
extra pricing. We've got reasonable hedging in place and that gives us some ability to recover in the short term. But, you know, this is an
industry that has coped with fuel prices of $140 a barrel, versus the $65 a barrel today. And we make money when the fuel was $140 a barrel. So, we
can do it again.
QUEST: What is your strategy for IAG's ownership in a post-Brexit world? And are you -- did you feel the pressure is off somewhat in the
transitional arrangements that will come in in next March effectively, give you time to sort that out?
WALSH: Well, we're very confident that our structures and ownership will comply with both the U.K. ownership and control rules and the European
ownership and control rules. It is interesting that a number of the airlines who have put new structures in place which they believe now
address all of this are just matching the structures we already have in place and have had in place since 2011. We've had extensive dialogue with
all of the relevant regulators. And we are confident, Richard, that a comprehensive air transport agreement will be reached between the EU and
U.K.
QUEST: Level is up and running and the second base has been announced, Paris. How far and how fast do you want to grow this thing?
[16:25:00] WALSH: We are growing to five aircraft from the two that's in operation today. We've said that we have a plan to go to 15 aircraft with
an option to go to 30 aircraft by 2022. And you know, we could move faster than that. So, the response has exceeded our expectation, and that gives
us great confidence, not just in the original plan that we have. And in fact, the fascinating thing here is I'm getting pressure from my board
saying why don't you do this faster?
So, one of the issues that we are considering is what aircraft do we use for the future development of Level? The airbus A-330 200 that we're using
today, absolutely the right aircraft to use. But going forward, we think maybe a 787 might be a better option as we expand. Particularly given the
trajectory of fuel prices. But very optimistic about the model. Delighted with the performance that we have had.
QUEST: Are you going shopping? Did I just get the idea that you -- you've got the -- you are off shopping for 787s and looking to get a price on a
couple of them?
WALSH: We are always standing there waiting for these great manufacturers to knock on our door and saying here is an offer you can't refuse. And
they know we want more aircrafts. There's good competition between Boeing and Airbus. Both have very good products and you know, we are ready. You
know, we've said we're going to expand the business. It's only a question of which aircraft do we use. And both Boeing and Airbus want our business
and it's a nice position to be in.
QUEST: Finally, time for upgrading British Airways' business class. It's time to upgrade it, Willy.
WALSH: That decision has been taken. We'll have a new product on aircraft that get delivered from 2019 and approved a retrofit program. As you know,
one of the constraints here is the supply chain. Getting seats available to put on the aircraft. But we will be changing and upgrading our product.
And we look at this all of the time. We've been delighted with the product that we used to have, but we recognize it's time for a change and we've
taken the decision to do that.
QUEST: Willie, congratulations. Good set of results.
WALSH: Thanks very much, Richard.
QUEST: I come back to the school report. Good set of results. Could do better next time. I can see --
WALSH: And will do better.
QUEST: Will do better. I can see the headmaster marking them down. Good to see you, Willie.
WALSH: Thanks, Richard.
(END VIDEOTAPE)
QUEST: Willie Walsh goes shopping, watch out for your wallet. When we come back after the break, Donald Trump Jr. is in India. It was a fireside
chat about how the Trump organization, not the Trump administration, is performing.
(COMMERCIAL BREAK)
[16:30:00] QUEST: I'm Richard Quest, there is more QUEST MEANS BUSINESS in just a moment. When the co-founder on Facebook, Chris Hughes, will join me
in the C-suite. And my exclusive interview with Dubai's Royal highness Princess Haya bint Al Hussein.
As we continue, this is CNN, and on this network, the facts always come first.
The secret service in the U.S. says a woman is in custody after a car deliberately struck a security checkpoint near the White House. The driver
was immediately apprehended. Emergency services are now on the scene.
World leaders are under increasing pressure to stop the killing in Syria. The French President Emmanuel Macron, the German Chancellor Angela Merkel
are urging the Russians to support UN resolution for a 30-day cease-fire. More than 40 people have died in the past five days. Human rights groups
say hospitals are being deliberately targeted.
U.S. State Department has said the Trump administration plans to move the U.S. embassy in Israel from Tel Aviv to Jerusalem in May. That would
coincide with Israel's 70th anniversary. The move is likely a preliminary step. It's a part of the broader relocation effort which the Secretary of
State says will take years.
I'm here as a businessman, not representing anyone. The words of Donald Trump Jr. as he capped off his trip to India with an appearance at a
conference for business leaders. His talk was rebranded as a fireside chat after an outcry of a potential conflicts of interest. John Defterios got a
few words with him in New Delhi.
(BEGIN VIDEOTAPE)
JOHN DEFTERIOS, CNNMONEY, EMERGING MARKETS EDITOR: Donald Trump Jr.'s appearance here was interesting for what he didn't say. What was
originally billed as a keynote speech on Indo/Pacific relations and U.S./India relations was actually a fireside chat, something much more
casual that steered completely clear of U.S. policy.
DONALD TRUMP JR., EXECUTIVE VICE PRESIDENT, THE TRUMP ORGANIZATION: I am here as a businessman. I am here not representing anyone, and I am here,
and I've been coming to India for over a decade.
DEFTERIOS (voice-over): I approached a guarded Donald Jr. before his appearance. He declined an interview. But only replied, you could say we
had a good week referring to property sales. After a speech by Indian Prime Minister, Narendra Modi, Donald Trump Jr. hosted an exclusive dinner
for those willing to put down $40,000 per unit as a deposit. And that was what this high-profile visit was all about, meeting with investors during
business to a $.5 billion project in Mumbai. For Trump Towers outside of Delhi, east of Kolkata and west in Pune. With five projects in the
country, India is the Trump organization's largest market outside of the United States. Back on stage, Donald Trump Jr. expressed frustration that
he could not pursue more business in the country because of a 2016 agreement by his father not to pursue more business while he's in office.
TRUMP JR.: Now because of this we're saying we can't do new deals understandably. So, I have to talk a little bit of a backseat. But that's
difficult because I feel so good about the market. I feel so good about the partnerships that I have that I could be doing 10x.
DEFTERIOS: Observers inside and out of the country took issue with Donald Jr. and his partners for blurring the lines for investors any potential
conflict of interest.
REUBEN ABRAHAM, CEO, IDFC INSTITURE: The question you've got to ask is at that point the people paying that money, are you paying that as a real
estate investment or are you paying that to gain access to someone who is clearly very close to the White House?
DEFTERIOS (on camera): A concern for some but overlooked by many wealthy Indians who are buying into the Trump brand, and in many cases for well
over a million dollars apiece. John Defterios, CNNMoney, New Delhi.
(END VIDEOTAPE)
QUEST: Our own fireside chat. Joining me is the Chidanand Rjghatta, the foreign editor of "The Times of India". Good to see you, sir.
India, did the business community in India has gone somewhat overboard and effusive. They've sort of lost reason a bit over the Trumps and
particularly this bit, haven't they?
CHIDANAND RJGHATTA, FOREIGN EDITOR, THE TIMES OF INDIA: Yes. Look, n the glamour portion. But the fact is that Trump and his family have had ties,
business ties with India predating when he has become president. And in fact, if I'm not mistaken this very group of realtors has collaborators in
India visited, you know, New York in the run-up -- during the election campaign and posed with them, you know, and spoke with him, distributed
photographs. So, they've been there. India is a lucrative market and you know, Indians love brand names. And the wealthy in India are quite
obviously smitten by Trump and Trump Towers and everything Trump.
[16:35:00] QUEST: So, do you think -- and I realize I'm asking a massive generalization here -- but do you think it is just to be associated, too,
or is there maybe, not now, maybe in the future and maybe in the near future, a wish to carry favor and some point there would be a quid pro quo?
RJGHATTA: I don't know about quid pro quo, Richard. But the fact is, you know, oligarchs are across the world operate in a different world, in a
different ecosystem. Most of the rules don't apply to them. Whether they're oligarchs from India, or China or Russia, or United States, or
Pakistan. Normal rules don't apply to them and they're not rule bound and there's a certain lack of moral clarity in this particular world. And so,
you know, hard as it is for, you know, the Trumps to separate their business from the White House and government, they put it as don't affect
each other and I find that hard to believe.
QUEST: But you would agree that there's an inevitability in the perception of conflict of interest. If you have a president's son involved in real
estate in an active way, there is going to be the possibility of conflict of interest. It's -- whether right or wrong or otherwise it's just going
to be there.
RJGHATTA: I totally agree. The perception will be that. The fact also is that Trump is cleverly used -- you know, I have to roll back and say this
before we go anywhere. Of all of the countries in the world that President Trump and the Trumps seem most comfortable with India. I have to remind
you that Ivanka Trump went to India. It was one of the first Trump family visits, shall we say. So, India has had two family members visit them
wondering when Melania and Barron will be there. But you're right, I mean, the perception will always be there that people are buying into Trump
property simply not just for the brand value, the glamour portion, but also, that at some point they'll have something beyond photo access.
QUEST: Good to see you, sir. Thank you. We look forward to talking more about this in the future. Thank you.
RJGHATTA: Thank you very much, Richard.
QUEST: Now, as we continue tonight, the cofounder of Facebook is with me. We will be talking. Good to see you, sir. We have much to talk about.
Come and join me in the C suite.
(COMMERCIAL BREAK)
QUEST: QUEST MEANS BUSINESS. Shares in Snap finish the week down around 14 percent. And its chief executive may have more than $600 million last
year. Now admittedly, most of that money comes from options even though there was a good dollop of it that was in cash. One of Facebook's
cofounders says these kinds of riches are sign of unfair inequality. He has a plan to fix it. Chris Hughes joins me now. What's your plan?
[16:40:00] CHRIS HUGHES, AUTHOR, "FIR SHOT: RETHINKING INEQUALITY AND HOW WE EARN": Well, I am here to talk about the way that the economy is and
isn't working. And today I think what's happening is a small group of people like some of the people you mentioned and myself are getting very
lucky and the 1 percent, if you will, while 99 percent of the people working hard can't make ends meet. Median wages haven't boosted in 40
years. And so, my plan is to bring a guaranteed income for working people to combat income inequality and provide stability to people who are working
and yet unfortunately our still living in poverty or fairly can get by.
QUEST: So, the basic income. Guaranteed minimum income. There are various versions of this at different points in the world. Iceland's
looked at it. The various Nordic countries have looked at it and some have introduced it.
HUGHES: It's been around for a couple hundred years. It comes back and forth. Richard Nixon was in favor of it. What I am particularly
interested in is using earned income tax credit which is extremely popular on the right and on the left making that monthly and flat. So, it's $ 500
for people who make less than $ 50,000 a year.
QUEST: OK. You can't even get a higher minimum wage agreement. You have states differences on what the minimum wage should be. There's never going
to be an agreement in this country on a basic income?
HUGHES: I beg to differ. I think there's been a lot of progress over the last 10 years in particular on the minimum wage. I mean the fight for 15,
five, eight years ago, everybody said, that was crazy. Now, several states have $15 minimum wage. And there is momentum behind that movement.
The issue is as much as we have higher minimum wages that doesn't help workers in the gig economy and not just Lyft drivers and Uber driver, but
folks who are doing part-time, temporary or seasonal kind of work. You could have a job and one week you get 25 hours and the next week you get
ten. So, at minimum wage it's helpful, but it doesn't provide the stability that 40 hours a week can, and benefits used to.
QUEST: No, but the earned -- the tax credit, the earned income tax credit is an extremely complicated construction, particularly for those that are
not, you know, filing taxes to start with, well and truly within the formal economy as opposed to the informal economy.
HUGHES: It's unnecessarily complicated, but it doesn't have to be. If we reform it to make it monthly and make it $500 a month for anybody who makes
50 grand or less, it can be simple. It is incredibly powerful. More are lifted out of poverty by the earned income tax credit in food stamps,
insurance and housing vouchers combined. It just needs to be modernized for the changing nature of work.
QUEST: Why have you taken this on yourself? Because obviously, you had the criticism thrown at you. It's all right for you, you've had this
criticism thrown at you many times. I'm not telling you as a seriously wealthy man yourself. Why did you decide to take this on?
HUGHES: The reason that I wrote the book -- the book is called "Fair Shot." It's out this week. Is to make the case that my case, while it
might be extreme, you know, I was the lucky roommate of Mark Zuckerberg, is not actually that uncommon. Many of the people who make up that 1 percent,
they're working hard. They've also getting very lucky. So, I think we need to open up the opportunity to have a frank conversation about the way
the economy is and isn't working today. And that begins with understanding what is happening that the fundamental unfairness that I think is driving
much of it.
QUEST: Since you have taken on social responsibilities like this, let's talk about that and with Facebook, being one of the co-founders. Are you
pleased with the way it's progressed? Obviously, the size and scale, who wouldn't be. But obviously, I'm thinking about today, the issue of the
infiltration -- and I hesitate to use the word fake news, but by using the phrase I would import you know what I'm talking about. The way it has been
hijacked.
HUGHES: Facebook is at a turning point. We saw in the 2016 election not just the issue with fake news, also the filter bubbles where you just
listen to people that you agree with and now increasingly we're learning what foreign powers we're trying to do to really hack our elections on
Facebook and elsewhere at the ballot box. But I think the good news is Facebook has taken responsibility for that. Mark in particular has
publicly said that his focus for this year is reckoning with the responsibility that Facebook has in civil society and in our politics to
solve many of these issues. It's not going to be easy, but I think that they're taking it seriously and it's a moment of maceration.
QUEST: Can it be sold in the sense that -- I was talking to Brian Stelter about this. When you've got 2 billion and you've got aa size and scale.
These fake accounts can come from every different direction, thousands a day, can any organization other than maybe a government actually manage
that?
HUGHES: I mean, Facebook's market cap is over $500 billion, and it has 2 billion people using the platform. So, the question is how much -- how
many resources can they invest to solve these problems? I mean, it's just turning the corner now to taking this, I think, as seriously as it needs to
be and to go even further.
QUEST: Is it another very serious issue of what you talked about the bubble. People only listen to -- I used to read newspapers which I
disagreed with and throw the paper across the room in a fit of pique and anger. I don't do that anymore.
[16:45:00] HUGHES: Yes, people don't do that anymore. But there are changes to make it easier for people to hear and listen to people that they
disagree with. This recent change in the news feed is their first attempt to try to encourage more dialogue and make progress. I don't know if
that's going to be the silver bullet here, but at least it's a step in the right direction.
QUEST: Good to have you, sir. Thank you so much.
HUGHES: Thanks for having me.
QUEST: As we continue tonight, Amazon shares close above $1500 for the first time. Hip, hip hooray. The stock is up 29 percent so far this year.
The rise in the share prices tracked the company's physical expansion. CNN's Clare Sebastian gained extraordinary access to one of Amazon's
fulfillment centers in Connecticut. Amazon's arrival there has trigger changes for all types of businesses.
(BEGIN VIDEOTAPE)
DON TRINKS, MAYOR OF WINDSOR, CONNECTICUT: I will probably remember as long as I live getting that phone call.
SEBASTIAN (voice-over): For Don Trinks, the mayor of Windsor, Connecticut, securing the Amazon fulfillment center was the crowning moment of his 16-
year career.
TRINKS: I was back porch pacing and the phone rang, and it was -- and all he said was it's a go.
All right, what are we having.
SEBASTIAN: Trinks, a volunteer who also runs Bart's Drive-In, a neighborhood hot dog joint, suddenly found himself thrust into negotiating
with a corporate giant.
TRINKS: It's become part of our identity and it's also been good for bringing in other businesses. We think, you know, if Amazon can go through
their due diligence and pick Windsor, maybe that's the place for us. The fulfillment center brought more than 1,500 jobs for Windsor and that impact
has trickled down to the town's existing businesses like Jim's Pizza.
PAM NIKOLAS, OWNER, JIM'S PIZZA: The biggest order we got from Amazon was 180 sheet pizzas in two days, in four different shifts. I had to borrow
pizza pans. I had to buy new pizza pans. I had to maneuver storage in my coolers for all of the cheese.
SEBASTIAN: She now gets orders from Amazon five days a week. Today is no exception.
NIKOLAS: Amazon just ordered $28. So that's just going to the security people.
SEBASTIAN: In the shadow of the fulfillment center, Four Seasons Landscaping now has a semi-permanent base.
BOB ST. JACQUES, PRESIDENT, FOUR SEASONS LANDSCAPING: Our snow removal part of it. We've added probably about 10 people.
SEBASTIAN (on camera): You've added ten people.
ST. JACQUES: Just for snow removal, yes.
SEBASTIAN: Without this contract here you wouldn't have needed them?
ST. JACQUES: No.
SEBASTIAN: What Amazon is doing here in Windsor is happening over and over again throughout the United States. Last year Amazon expanded its
fulfillment network by 30 percent. There are now more than 75 of these centers with many more to come. The big question is long term, does this
actually help these communities?
(voice-over): Local unions worry the fulfillment centers attract mainly low-paying jobs.
LORI PELLETIER, PRESIDENT, CONNECTICUT AFL-CIO: Members that we do represent are ready in the retail sector, are concerned that they are
driving the wages down and so we don't want to see that.
SEBASTIAN: A recent study by the left-leaning Economic Policy Institute found that there were Amazon warehouses boost warehouse and storage jobs,
they actually don't help overall employment and don't warrant the tax breaks that towns often give them. Windsor, for example, is giving up
almost $4 million in tax revenues to Amazon. Money the mayor says will be quickly recouped.
TRINKS: To us, the benefit of to the 29,000 people of Windsor is over a million, about $1,006,000 in new tax revenue every year.
SEBASTIAN: For a town with deep historical roots this he says, is a stake in the future. Clare Sebastian, CNNMoney, Windsor, Connecticut.
(END VIDEOTAPE)
QUEST: Dubai has a reputation for unparalleled expertise in the field of logistics. It's now being put to very good use whenever disasters strike
around the world. After the break, a rare tour of its giant International Humanitarian City by the wife of the ruler of Dubai no less.
[16:50:00] (COMMERCIAL BREAK)
QUEST: In the chaos and confusion of any major disaster, getting the right aid to the right place crucial and no easy task. Now all of that will
become easier thanks to Dubai's Royal Highness Princess Haya bint Al Hussein. CNN gained exclusive access to a new system that will share
information amongst aid agencies, and I got a rare peek inside Dubai's giant International Humanitarian City.
(BEGIN VIDEOTAPE)
QUEST (voice-over): An earthquake strikes Haiti in 2010. In 2013 a typhoon devastates the Philippines. In South Sudan conflict leaves a
refugee crisis. In Bangladesh, Rohingya victims are without food and shelter. Disasters, natural and manmade, when aid is needed it comes from
deep in the desert of Dubai.
HRH PRINCESS HAYA BINT AL HUSSEIN, CHAIRWOMAN, INTERNATIONAL HUMANITARIAN CITY: That is the IOC. All of these warehouses are full of humanitarian
aid.
QUEST (on camera): And where is the aid coming from?
BINT AL HUSSEIN: From the UN agencies. We've got now 17 member, NGOs, different charities and they store all of their stock here and we
facilitate and help coordinate in emergencies.
QUEST: Look at the size of this thing.
(voice-over): An international humanitarian city under the leadership of her Royal Highness Princess Haya bint Al Hussein.
BINT AL HUSSEIN: We can get anything in the world within eight hours. And unfortunately, over 50 percent of now the humanitarian problems of the
world are really around this middle region. We supply for any humanitarian emergency whether it's natural disaster or manmade, and we respond in a
completely apolitical manner.
QUEST: Her royal highness is married to His Highness Sheikh Mohammed Ben Rashid Al Maktoum, and the vice president and the prime minister of the UAE
and ruler of Dubai. Together, dispatching aid at a moment's notice. Taking advantage of the giant Jebel Ali port, by two world-class airports.
BINT AL HUSSEIN: There wasn't anything like this in existence, so to speak. The idea to position it here was really incredible. We have the
sea right next to us. We've got the port. We've got the airport next to us. We can move from sea to air in seven minutes to be able to deliver,
and logistics is, yes, it's a signature of Dubai.
QUEST: Logistics all in one place. Here is anything you could need for any emergency.
(on camera): It's quite overwhelming actually.
(voice-over): First aid and pharmaceuticals, tents and trucks and food, making the difference between life and death.
BINT AL HUSSEIN: It's a means to survive, when you look at most of the crisis especially now with the refugees. The amount of miles they have to
walk with families to save themselves, to save their children. These are life savers. The amount of storage of refugees --
QUEST: Dubai wants to take aid and its expertise in logistics to the next level. By linking up aid inventory around the world, who's got what and
where? Led by a former UN logistics expert, Giuseppe Saba.
GIUSEPPE SABA, CEO, INTERNATIONAL HUMANITARIAN CITY: You have food in the warehouses, shelter and education and protection, logistics, assets,
telecommunications, water and sanitation.
[16:55:00] QUEST: Making sure aid moves fast needs support at the highest level by the ruler himself.
BINT AL HUSSEIN: As soon as Giuseppe calls me and says WFP needs a plane to go to Bangladesh, UNHCR needs to send something Integra. Within minute,
I'm calling Sheikh Muhammad. I'm asking him for permission to mobilize the aircraft.
QUEST: Dubai, known for its glitz and glamour, now helping disaster victims who have lost it all.
BINT AL HUSSEIN: I am really proud of what he does, and what the government of the UAE do and what I'm allowed to do, and it helps me to
sleep at night. But I don't think any of the leadership here feels they can pat themselves on the back and say it's a job well done. The nature of
what we're dealing with it's never well done until it's over.
(END VIDEOTAPE)
QUEST: Allow me to bring you some breaking news. The special counsel Robert Mueller has filed new charges against former Trump campaign manager,
Paul Manafort. He is now accused of -- and listen to this carefully -- secretly retaining a group of former senior European politicians to take
positions favorable to Ukraine included by lobbying in the United States. He's accused of doing that with the help of Trump's former campaign
manager, Rick Gates, who today pled guilty to two criminal charges of conspiracy and lying. We have no idea who these senior European
politicians are, nor any more details about the money. When we get those will let you know. Profitable Moment next.
(END VIDEOTAPE)
QUEST: Tonight's Profitable Moment, what a busy week it has been. And next week we promise more of the same and similar. Particularly on
Wednesday, when the program will come from World Port, which is the UPS main logistics center in the United States. That's live, from UPS next
week.
And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable.
I'll see you next week.
END
